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Driving Value in Medicaid Primary Care: The Role of Shared Support Networks for Physician Practices

The Affordable Care Act gives state Medicaid agencies significant opportunities to redesign the primary care delivery system so as to optimize health care value. Small practices in particular, especially those that serve large numbers of Medicaid patients, can benefit from access to a network of shared resources, or "practice supports," that help implement new models of primary care and sustain the transformation process. This paper, based on consultation with national and state experts, key informant interviews, and the authors' policy research, describes how Medicaid can purchase or catalyze investments in such shared practice supports.

Key points include:
Practice supports have diverse manifestations. They may be seen, for example, as resources for strengthening leadership, culture, and the capacity for change; as aids to practices’ various administrative and financial functions; and as staffing reinforcements such as shared practice facilitators and nurse care managers.

Medicaid can connect physician practices and deliver shared practice supports in a number of ways. As a significant insurer in most states, Medicaid could use its market power and influence to drive changes in primary care delivery in general and the provision of practice supports in particular. By viewing practice supports as publicly financed "shared utilities," Medicaid could lead in efforts to organize virtual or real networks of physician practices through such trusted entities.

Medicaid and the Affordable Care Act present states with a number of financing vehicles. States have an array of options for funding practice supports, depending on the type of Medicaid delivery systems involved (e.g., full-risk managed care, primary care case management, or fee-for-service) and on whether states want to build such supports themselves, buy them from third parties, or create incentives for physicians to purchase them directly. In addition, states could redesign physician payment mechanisms so as to recognize the iterative process of transformation and reward better outcomes. State Medicaid agencies could pursue such efforts alone, but they should also consider developing or joining existing multipayer efforts.

Other policy opportunities exist in the Affordable Care Act and in current Medicaid statute to advance primary care. The health reform law includes several vehicles, including provisions on health homes and increased federal funding for primary care, to assist states in developing and financing practice transformation. The Centers for Medicare and Medicaid Services' review of these provisions, as well as of other current and developing policies and regulations, could allow states considerable flexibility in creating and financing shared-support models.

This report develops the above points, and it discusses other potential strategies for Medicaid to purchase and advance high-value primary care, provide shared supports, and build virtual networks that essentially create communities of caregivers in small physician practices. Because they address distinct aspects of practice transformation, numerous provisions of the Affordable Care Act provide additional supports to practices. But it is up to the states to strengthen support for primary care providers by using these provisions in a strategic and coordinated way.

Publication Details



N. Highsmith and J. Berenson, Driving Value in Medicaid Primary Care: The Role of Shared Support Networks for Physician Practices, The Commonwealth Fund, March 2011.